Stock underwriting revenues may be fleeting

Sanford Bernstein analyst Brad Hintz has issued a report discussing the strong equity underwriting activity as of late. Volume was up 86 percent through Wednesday compared to the first quarter. Goldman Sachs has fared best with $516 million in revenues this quarter. As reported by TheStreet.com, it was followed by JPMorgan Chase, Morgan Stanley and Bank of America. Citigroup came in fifth.

Of course, you would have to think this is a temporary phenomenon. Financial services firms accounted for about half the volume, as TARP banks and others rushed to raise capital. Revenues were also inflated a bit by banks paying themselves for underwriting their own shares. So this is one more reason to be cautious about earnings. There are lots of one-time items that have to be figured in.

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